Methanex (MEOH) Down 3.6% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Methanex (MEOH). Shares have lost about 3.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Methanex due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Methanex's Q2 Earnings & Revenues Surpass Estimates
Methanex logged second-quarter 2023 adjusted earnings of 60 cents per share compared with $1.16 in the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate of 55 cents.
Revenues declined around 17.4% year over year to $939.4 million in the quarter. However, the top line beat the Zacks Consensus Estimate of $901 million.
Adjusted EBITDA in the reported quarter fell 34.2% year over year to $160 million.
Operational Highlights
Production in the quarter totaled 1,658,000 tons, up around 6.9% year over year. The figure surpassed our estimate of 1,621,000 tons. Total sales volume in the second quarter was 2,782,000 tons, higher than the prior-year quarter’s figure of 2,692,000 tons. The figure surpassed our estimate of 2,678,000 tons.
The average realized price for methanol was $338 per ton, down roughly 19.9% from $422 per ton in the prior-year quarter. The figure was below our estimate of $352 per ton.
Financials
Cash and cash equivalents fell 17.2% from the prior quarter to $645.7 million at the end of the second quarter. Long-term debt at the end of the quarter was $2,131.2 million, down from $2,133.8 million sequentially.
Cash flow from operating activities was $196.4 million, up around 85.3% year over year. The company returned $51 million to shareholders through dividends and share repurchases in the quarter.
Outlook
In 2023, the company anticipates producing about 6.5 million equity tons, excluding any G3 output. Based on the timing of turnarounds, gas availability, unanticipated events, unscheduled outages and other factors, actual production may vary each quarter, it noted.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -1225% due to these changes.
VGM Scores
Currently, Methanex has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Methanex has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Methanex Corporation (MEOH) : Free Stock Analysis Report
